Om Prakash Goel v. Lakshmiratan Engr. Works Ltd — 1973 DIGILAW 75 (ALL)

JUDGMENT K.N. Singh, J. - Om Prakash Goel appellant filed an application before the Authority under the Payment of Wages Act at Kanpur under Sec. 15(2) claiming wages for the period between 20th March, 1963 to 31st May, 1963, as delayed and refused wages, he further claimed compensation amounting to Rs. 30,776.80. The Authority under the Payment of Wages Act (hereinafter referred to as the Authority) upheld the appellant's claim for the wages and awarded compensation ten times of the amount of wages on the ground that the employers namely Laxmiratan Engineering Works Ltd. respondent had illegally deducted the appellant's wages. Tire employers filed an appeal before the District Judge to which was rejected. Thereafter they filed a writ petition in this Court. A learned Single Judge allowed the writ petition. He quashed the order of the Prescribed Authority in so far as it directed the employers to pay ten times of the amount of Rs. 632.58 by way of compensation to the appellant. The learned Single Judge, however, upheld the award of Rs. 632.58 as wages payable to the appellant. Aggrieved, the workman has filed the present appeal. 2. Learned counsel for the appellant has contended that the employers did not pay any wages to the appellant for the period between 20th March, 1963 to 31st May, 1963, as such it was a case of deduction of wages. The learned Single Judge has wrongly held that it was not a case of delay in the payment of wages. He further urged that the appellant was entitled to compensation in addition to the wages as awarded by the Authority and the learned Single Judge was not justified in setting aside the award of compensation. 3. The Payment of Wages Act, 1936, is enacted to regulate payment of wages to certain employers of any industry or by a railway administration or by a person fulfilling a contract with the railway administration or with any industrial establishment to which the State Government has by notification extended the Act. Sec. 2, inter alia, defines wages which include all remuneration, allowance, expressed in terms of money or capable of being so expressed, payable to a person employed in any industry or in respect of the work done in such employment. Sec. 2, inter alia, defines wages which include all remuneration, allowance, expressed in terms of money or capable of being so expressed, payable to a person employed in any industry or in respect of the work done in such employment. Sec. 4 prescribes for fixation of wage period and requires that no wage period shall exceed one month, while Section 5 enjoins on the employers to pay the wages to the employees within 7th or 10th day of expiry of the wages period. Sec. 7 provides that wages shall be paid without deduction of any kind except those authorised by the Act. Secs. 9 to 13 lay down the deductions which the employers are authorised to make and the conditions under which such deductions can be made. Sec. 15(1) of the Act provides for the appointment of a person to be the Authority under the Act to hear and decide any claims arising out of deduction from wages or delay in payment of wages of persons employed or paid in that area including all matters incidental to such claims. Sub-sec. (2) of Section 15 provides that where any deduction has been made contrary to the provisions of the Act from the wages of employed person or any payment of wages has been delayed, the affected employee or any legal practitioner or Inspector on his behalf may apply to the Authority for a direction under Sub-sec. (3). Proviso to Sub-sec. (2) prescribes limitation of 12 months for making the claim before the Authority. Sub-sec. (3) empowers the Authority to hear applicant and the employer and to decide the claim. It is empowered to direct the employer to refund the amount deducted from the wages of the employee and in case of delayed wages, for payment of wages. In the former case the Authority is empowered to award compensation to the employee not exceeding ten times the amount deducted from his wages, while in the latter case the Authority may award compensation not exceeding Rs. 25/- . Sub-sec. (3) therefore, confers jurisdiction on the Authority to entertain claims for the refund of any portion of wages which may have been deducted from the wages of an employee and also for the payment of wages which may not have been paid by the employer within the wage period fixed under the Act. 4. 25/- . Sub-sec. (3) therefore, confers jurisdiction on the Authority to entertain claims for the refund of any portion of wages which may have been deducted from the wages of an employee and also for the payment of wages which may not have been paid by the employer within the wage period fixed under the Act. 4. In the present case the appellant made a claim before the Authority that the employers did not pay wages to him at all for the period between 20th March, 1963, to 31st May, 1963. The employers asserted that the appellant was employed as unpaid apprentice during the said period, hence he was not entitled to any wages. On the evidence on record the Authority held that the appellant was entitled to his wages for the said period as during that period he was not employed as an unpaid apprentice. The employers did not claim any amount from the appellant's wages by way of deduction. The question which arises for consideration is whether in the circumstances it was a case of delayed payment of wages or a case of deduction of wages. 5. Secs. 7 to 13 of the Act prescribe the permissible deductions under the Act. An employer is entitled to make deductions from the wages of an employee, provided the subject-matter of deduction is covered by Secs. 7 to 13. The permissible deductions include fines, deductions for absence from duty, deduction for loss of goods, deduction for house accommodation, deduction for recovery of advances made to the employee, deduction for recovery of loans taken by the employee, deduction for recovery of income-tax payable by the employee and deductions on account of any order of a Court, deductions for subscription to and for repayment of advances etc. Deductions of any kind except those authorised under the Act are not permissible. The concept of deduction is that a portion of the wages due to the employee is with held by the employer. In the present case since no payment was made at all on the ground that the appellant was not a paid employee, it could not be a case of deduction from his wages. In our opinion the learned Single Judge rightly held that it was not a case of deduction. 6. In the present case since no payment was made at all on the ground that the appellant was not a paid employee, it could not be a case of deduction from his wages. In our opinion the learned Single Judge rightly held that it was not a case of deduction. 6. Learned counsel for the appellant urged that withholding of the entire amount of wages will also amount to deduction of wages, and for this purpose he referred to a number of authorities. 7. In Rishal Singh v. Union of India, AIR 1958 Punjab 155 two railway employees who had been removed from service obtained a decree for reinstatement from the civil court. Thereafter they made an application under Section 15 of the Act before the Authority claiming payment of wages due to them upto the date of the application. The Prescribed Authority rejected the claim of the workman. Thereafter the workmen filed a revision before this High Court. On behalf of the railway it was urged before the High Court that Section 15 of the Act provides for recovery by the employed persons of wages either wrongfully deducted or delayed and it did not cover a case in which wages were with held because the liability to pay them at all was disputed and further the matter was justiciable only by ordinary civil court. Falshaw, J. repelled the contention raised on behalf of the railway. He set aside the order of the Authority and held- "It is thus clear that whereas there is no direct authority to the contrary, there are a number of decisions in which wages with held either without actually dismissing an employee but merely compelling him to remain on leave without pay, or withheld from the employee once removed from service but later reinstated can be treated as either wages deducted or wages regarding which there has been a delay in payment and that the authority had jurisdiction to adjudicate upon the claims like those of the present petitioners, and in my opinion this is a correct view of the matter." In Upper India Couper Paper Mills Co. Ltd. v. J. C. Mathur, AIR 1959 Alld. Ltd. v. J. C. Mathur, AIR 1959 Alld. 664, one of the questions which arose for decision was as to whether the order of the Authority under the Payment of Wages Act directing payment of wages to the workman was without jurisdiction and whether a suit on behalf of the employers was maintainable before the Civil Court challenging the jurisdiction of the Prescribed Authority. The Prescribed Authority had upheld the claim of the workman and awarded wages and compensation to him. On appeal by the employers, the District Judge modified the said order by directing that the workman was entitled only to wages. The employers did not pay the money, instead they filed a suit seeking a relief for the issue of an injunction restraining the authorities from getting any coercive process issued against the employers for the realisation of any amount as salary and wages as directed by the Authority under the Payment of Wages Act. The trial court dismissed the suit. On appeal before the High Court the employers urged that an application under Section 15 of the Payment of Wages Act was maintainable only in case of deduction from wages or in case of delay in payment of wages. It was further urged that since the claim for wages was for the period during which the workman was laid off and the liability to pay any wages at all was disputed, the case would not fall under Section 15 of the Act, hence the application of the workman for the payment of wages for that period was not maintainable. Nasirullah Beg, J. repelled the argument, dismissed the appeal and upheld the decree of the trial court. The learned Judge held that if the non-payment of wages cannot fail within the category of deducted wages there was no difficulty in holding that it fell within the category of 'delayed wages'. While repelling the contention of the employers the learned Judge observed "The deductions may relate to the specific heads mentioned in the particular sections of the Act or they may be deductions resulting from other causes. They may be the result of with-holding of part of the wages or of the entire amount of the wages. While repelling the contention of the employers the learned Judge observed "The deductions may relate to the specific heads mentioned in the particular sections of the Act or they may be deductions resulting from other causes. They may be the result of with-holding of part of the wages or of the entire amount of the wages. The word deductions in Section 15 appears to be used in a wide sense so as to include the entire deficiency which the employee alleges to have been caused in the payment of wages, as a result of the withholding of the same by the employer whether partially or wholly. It seems to me to be unreasonable to hold that the legislature intended that where the employer with-held payment of one pie from the salary due, an application would be maintainable, it being a case of deduction but where the employer with-held the entire salary the application would not be maintainable as it was not a case of deduction. I may mention that in a Full Bench case in Vishwanath Tukaram v. General Manager, Central Railway, AIR 1958 Bom. 111 , the Bombay High Court was of the opinion that such a claim would be maintainable. In this case no doubt this specific point was not raised. The Court presumed that such a claim would be maintainable. Further I may mention that if the present case would not fall within the category of `deducted wages' I see no sufficient reason for not bringing it within the category of `delayed wages'." In the above noted case the question as to whether any compensation 'was payable to the workman on the ground of deduction of wages was not raised or considered at all. 8. In Ram Prakash Agnihotri v. Union of India, AIR 1967 Alld. 233 the matter came to the High Court in second appeal. Ram Prakash Agnihotri filed a suit challenging his dismissal from service of the Western Railway. Subsequently he was reinstated but his salary was not paid. He thereupon filed a suit in the civil court for the recovery of the salary. The trial court decreed the suit but on appeal by the railway the suit was dismissed by the lower appellate court on the ground that the suit was barred by Section 22 of the Payment of Wages Act. The aggrieved workman filed a second appeal before the High Court. The trial court decreed the suit but on appeal by the railway the suit was dismissed by the lower appellate court on the ground that the suit was barred by Section 22 of the Payment of Wages Act. The aggrieved workman filed a second appeal before the High Court. The question which was considered in that case was whether the suit of the workman was barred by the provisions of Section 23 of the Act. On behalf of the workman it was urged that non-payment of his wages did not amount to a deduction from his wages and non-payment of the whole salary was therefore not covered by Sec. 15(3) of the Act. A Division Bench of lids Court rejected the contention of the workman. While repelling the contention of workman their Lordships held : - "Wherever wages are due and they are withheld for some reason or the other it is clearly a case of deduction of wages and if the reason for deducting the wages is not an authorised reason under Section 7, then the employee has a remedy under Section 15 of the Payment of Wages Act." The above observation no doubt lends some support to the appellant's contention but their Lordships were not concerned with the question of Payment of Compensation . Before the Division Bench the question was whether the suit was maintainable. The Division Bench held that where no wages, were paid at all application was maintainable under Section 15 of the Payment of Wages Act, hence a civil suit for recovery of the wages by the workman was barred. The rule of daw laid down in that case does not relate to the question involved in the present case. 9. In Raj Kumar v. Mohan Lal, AIR 1969 Alld. 472, the workman filed a suit seeking declaration that his discharge from service was unlawful and that he continued to be in service throughout. The suit was dismissed by the trial court but was decreed on appeal. The railway authorities reinstated him but he was not paid any salary. The workman made an application under Section 15 of the Act claiming wages for the period during which he had been unlawfully discharged from service. The Authority accepted the case of the appellant and directed the railway administration to pay the amount claimed by the workman. The railway authorities reinstated him but he was not paid any salary. The workman made an application under Section 15 of the Act claiming wages for the period during which he had been unlawfully discharged from service. The Authority accepted the case of the appellant and directed the railway administration to pay the amount claimed by the workman. On appeal by the railway administration, the District Judge set aside the order of the Authority and dismissed the workman's claim. The workman challenged the order of the District Judge in revision before this Court. A learned Single Judge accepted the workman's contention that non-payment of wages to an employee whether wholly or in part for the period between his wrongful dismissal and his reinstatement is a case of deduction and was covered by the provisions of Sec. 15(2) of the Act. As such the workman's claim was maintainable and the Authority had jurisdiction to entertain the workman's application. In coming to that conclusion the learned Single Judge placed reliance on the case of Upper India Couper Paper Mills v. J. C. Mathur, AIR 1959 Alld. 664. The learned Single Judge, however, dismissed the revision on the ground that the workman's claim was barred by time. In this case also the learned Judge was not dealing with the question with which we are faced in the present case. The question with which we are concerned in the present case squarely did not fail for consideration in any of the aforesaid cases. 10. In the case before us, the question is whether non-payment of wages would' amount to deduction of wages or it shall be a case of delayed payment of wages for purposes of awarding compensation under Sub-sec. (3) of Section 15 of the Act. The Authority under the Act had jurisdiction to entertain claims of both kinds whether it be a case of deduction or delayed payment of wages. In none of the aforementioned cases the question of payment of compensation on account of deduction of wages was raised or considered. The jurisdiction of the authority to award compensation ten times of the amount of wages deducted from the wages of a workman did not fall for consideration in any of the aforesaid cases. In our opinion, therefore, none of the cases cited by the learned counsel for the appellant lend: any support to the appellant's case. The jurisdiction of the authority to award compensation ten times of the amount of wages deducted from the wages of a workman did not fall for consideration in any of the aforesaid cases. In our opinion, therefore, none of the cases cited by the learned counsel for the appellant lend: any support to the appellant's case. We have already held that in the present case no portion of wages was paid to the workman at all on the ground that he was not paid employee. Hence it is not a case of deduction of wages. If on enquiry the Authority found that the workman was entitled to wages which was not paid to him by the employer it would be a case of delayed wages and in that situation the Authority has no jurisdiction between compensation in the shape of ten times of the wages. The appellant's claim before the Authority was that he was entitled to wages as he was a paid employee but the employers did not pay his wages at all. The appellant did not set up a case that any portion of his wages was illegally deducted by the employers. On the hand, in his application the appellant specifically claimed relief for the payment of his delayed and refused wages. The appellant thus himself claimed relief on the ground of delayed wages. He did not claim any relief with the allegathat any portion of his wages was deducted by the employers. The Authority, in our opinion, had no jurisdiction to make out a new case and award compensation to the appellant treating the claim to be one of deduction oi wages. As already observed the jurisdiction of the Authority to award compensation not exceeding ten times of the amount deducted is confined only to situation where there is deduction of wages but in case of non-payment oi any wages the -Authority has no jurisdiction to award such compensation. The proviso to Sub-sec. (3) makes the position clear which is. As already observed the jurisdiction of the Authority to award compensation not exceeding ten times of the amount deducted is confined only to situation where there is deduction of wages but in case of non-payment oi any wages the -Authority has no jurisdiction to award such compensation. The proviso to Sub-sec. (3) makes the position clear which is. set out as under: "Provided that no direction for payment of compensation shall be made in the case of delayed wages if the Authority is satisfied that the delay was due to: - (a) a bona fide error or bona fide dispute as to the amount payable to the employed person, or (b) the occurrence of an emergency, or the existence of exceptional circumstances, such that the person responsible for the payment of wages was unable, though exercising reasonable diligence, to make prompt payment, or (c) the failure of the employed person to apply, for or accept payment." Clause (a) of the proviso to Sub-sec. (3) makes it clear that where the wages are not paid to the employee during the period when it is due on account of a bona fide dispute regarding the employee's right to the wages, it would be a case of delayed wages. The enactment of the proviso to Sub-sec. (3) indicates the legislative intent that where the employer disputes the claim for wages of the employee in a bona fide manner and he justifies his action in not paying the wages in the fixed wages period under the Act, it would be a case of delayed wages. 11. We, are, therefore, of the opinion that it was a case of delayed wages and not of deduction of wages, hence, the Authority had no jurisdiction to award compensation of ten times of wages. 12. The question then arises as to whether the appellant is entitled to any compensation and if so, to what amount. The employers in the present case denied their liability to pay wages to the appellant on the ground that the appellant was employed as an unpaid apprentice, while the appellant claimed before the Authority that he was a paid employee, and as such, entitled to wages. The Authority recorded a finding that the appellant was a paid employee and the employers had wrongfully not paid his wages as and when due. The Authority recorded a finding that the appellant was a paid employee and the employers had wrongfully not paid his wages as and when due. In these circumstances, it is difficult to hold that the dispute raised by the employers was a bona fide one. The employers did not even raise a plea that the dispute was bona fide. The appellant was entitled to compensation payable to him under Sub-sec. (3) of Section 15 of the Act for the delayed payment of wages. The aforesaid provision lays down that in case or delayed wages compensation not exceeding Rs. 25/- can be awarded in favour of the employee. On the facts and in the circumstances of the present case we are of the opinion that the appellant is entitled to Rs. 25/- as compensation over and above the award of Rs. 632.58 p. as wages payable to the appellant. 13. In the result, we allow the appeal partly and modify the judgment of the learned Single Judge to the extent that the respondent shall pay a sum of Rs. 25/- as compensation to the appellant in addition to the amount of Rs. 662.58p awarded as wages to him. Parties shall bear their own costs.